British firm to invest $30 mn in India’s education sector (Lead)June 24th, 2009 - 9:14 pm ICT by IANS
New Delhi, June 24 (IANS) To boost its presence in the Indian education sector, Pearson, a Britain-headquartered education and information company, will invest $30 million in Indian education resource provider Educomp Solutions and Bangalore-based online tutorial firm TutorVista, the company announced Wednesday.
Pearson will acquire 50 percent stake in Educomp Solutions for $17.5 million as part of their agreement signed Wednesday. The unit will then be converted into a 50-50 joint venture, the two companies said in a joint statement.
The company refused to give specific detail of rest of the investment but said it will be used in the acquisition of TutorVista and setting up other educational businesses and infrastructure in India.
“The focus of the government is not just employment but employability, so there will be a lot of focus on skill-based knowledge,” Vivek Govil, president and chief executive of Pearson Education, told reporters here.
“India has a huge demand for specialised vocational training. The joint venture will target specialised training to various business houses and companies in sectors such as food services, construction, security, hospitality, financial services and retail,” he added.
“The Indian government spends $30 billion a year on the education sector, while Indian consumers spend $50 billion a year on private educational institutions and services, so it makes a huge business proposition.”
However, the company’s focus will be on providing customised vocational training to business houses rather than to go for the retail training mode.
“The partnership will address the growing chasm between education and employability in India,” said Educomp chief executive and managing director Shantanu Prakash.
Pearson has also bought a 17.2 percent stake in TutorVista. “This joint venture will target offshore tutorials and students based in the US from the category of 5 to 9 grade,” Govil said.
“Offshore tutorial is a huge market and the cost effectiveness makes it more attractive. We will be charging about $99 for three months. The same facility costs about six-seven times more in the US,” he added.
TutorVista has already received funding from Manipal Educational and Medical Group and private equity fund LightSpeed Venture Partners.
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Tags: business houses, business proposition, chasm, construction security, education resource, education sector, educational businesses, educomp solutions, food services, indian consumers, indian education, indian government, information company, pearson education, prakash, private educational institutions, resource provider, retail training, s education, vocational training